This invention relates to financial organizing systems in general and to a personal, portable financial organizing system in particular for use by an individual who desires to monitor, control, and reduce personal spending on a daily basis for an extended period of time.
In addition to providing a convenient portable means for accurately projecting spending in various categories by month and by week, for recording daily, weekly, and monthly spending by spending category, and determining how much income to set aside for future spending, this invention also provides means for determining the differential between projected spending and actual spending per category by week and by month and for determining monthly cash flow. Furthermore, the invention provides a semi-annual financial progress report on total actual spending per month per category and on cash flow, a means for recording debt payments, and a means for recording tax deductible spending.
For many individuals, successful control of personal spending on a monthly or yearly basis requires successful control of personal spending on a daily basis. In the present invention, detailed analysis of daily spending on a weekly and monthly basis leads to an understanding of problem areas of spending and suggests ways to correct the spending problem. This can be accomplished by evaluation of weekly and monthly differentials between projected spending and actual spending and their relation to monthly cash flow. It is then possible to adjust discrete areas of spending to create positive spending differentials and positive cash flow, i.e., to make actual spending less than projected spending and to make actual spending less than net income.
A preferred embodiment of the invention contains a trifold cover with an inner lining that provides insertions for a check book, a check register, cards, and a unique personal financial organizer for monitoring, controlling, and reducing spending. With the personal financial organizer a user records on one set of pages, referred to as a Systematic Bill Payment Organizer, fixed bills that are due at regular intervals and determines from another set of pages, referred to as a Category Descriptions, which contain suggested spending categories, those categories that apply to the user. With this information a user makes an initial entry of monthly income and monthly projected spending amounts on designated pages, referred to as a Trac-A-Spending-Plan.TM. Worksheet, and, thereafter, enters initial weekly projected spending amounts on designated pages, referred to as a Weekly Projected Spending Worksheet. Monthly projected spending amounts are then transferred to a financial analysis page called Monthly Grand Totals. Weekly and monthly net incomes are also recorded on the Monthly Grand Totals. Weekly projected spending amounts are then transferred to a financial analysis page called Household Spending Record. Weekly projected spending amounts are also transferred to a daily spending record referred to as a Money-Tracker.TM.. The user then sets aside certain amounts of income for future spending and enters these amounts on designated pages, referred to as an Earmarked Funds Worksheet.
At this point the user is ready to record daily spending on the Money-Tracker.TM.. At the end of a week, total weekly actual spending per category and total weekly actual spending are calculated and these amounts are transferred to the Household Spending Record. The difference between projected spending per week and total weekly actual spending is calculated. This amount is referred to as a weekly spending differential. With this information the user can modify weekly projected spending and/or the amount of income to be set aside for future spending in order to keep the weekly spending differential positive. This process is repeated until one month is completed.
At the end of one month, a user calculates total monthly actual spending per category on the Household Spending Record. These amounts are transferred to the Monthly Grand Totals. A monthly spending differential per category and total monthly spending differential are calculated. Net cash flow, i.e., the difference between monthly net income and monthly actual spending, is calculated. This information is used to make adjustments in monthly and weekly projected spending in order to keep the monthly spending differential and cash flow positive. This process is repeated for a total of six months.
The user then prepares a semi-annual financial report on financial analysis pages referred to as a Semi-annual Financial Progress Report. Monthly net income, monthly projected spending per category, and monthly actual spending per category are transferred from six consecutive Monthly Grand Totals to the Semi-annual Financial Progress Report. Average six month actual spending per category, average six month actual spending per category as percent of average six-month monthly income, total monthly actual spending, monthly cash flow, average six month total monthly actual spending and six month average monthly cash flow are calculated. This information is used to further refine monthly projected spending, weekly projected spending, and daily spending to keep spending differentials and cash flows positive.
Two additional mechanisms are included in the personal financial organizer to help maintain cash flow positive. One is a Debt Reduction Worksheet on which a user records all debt and interest obligations and a payment schedule to reduce interest spending as rapidly as possible. This worksheet alerts the user to debt accumulation and helps curb debt accumulation such as credit card spending. The other is a tax deductible record, referred to as Tax-Trac.TM. on which a user records tax deductible spending as it occurs to facilitate a reduction in taxable income at the end of the year.
At present, most individuals carry a check book and check register and record spending by check. It is also possible to carry a booklet that records monthly income, budget amounts, and budget balance amounts. However, these types of booklets do not provide therein any financial analysis or financial summaries. It is necessary to go to other separate workbooks to calculate useful information such as spending differentials or cash flow.
The present invention was uniquely conceived and structured so that it contains financial recording and financial analysis components covering periods up to 12 months, all within a convenient portable booklet that can be carried in a pocket of clothing or in a purse. Furthermore, the invention provides means for an iterative or cycling process among monthly projected spending, weekly projected spending, daily actual spending, weekly actual spending, and monthly actual spending, facilitated by weekly, monthly, and semi-annual financial analyses, to make spending adjustments in order to maintain spending differentials and cash flows positive. It has not been possible until the present invention to have a pocket-size, self-contained, personal financial organizer that can be used up to twelve months to monitor, control, and reduce spending by this process.